The Questions are More Important Than the Answers

Tag Archives: exonomic growth and development

Central banks

Since I started learning about bitcoin as an alternative to traditional paper money, I have often wondered why we have come to accept banking as it is constituted today. There are lots of problems with the current banking system but we are so conditioned to it that we don’t consider it’s problems to be problems.

We accept all the problems with banking to be normal. Is it normal that a signed cheque should take days to clear? Why is it expensive to send money from the west to developing countries? Why do banks close at a certain time? Why is access to my own money controlled by institutions like banks and governments?

Central banks decide how much money to print and put into circulation. They are causing financial exclusion by their actions. Is poverty a conscious decision made by banks and those who control them?

There are many questions that need answers but most people have never thought to ask. We have never realised there are problems until bitcoin started solving them.

Fiat currency

Fiat currency is backed by the trust we place in the government issuing it. When we begin to lose trust in the issuing authority, then the currency crumbles like a deck of cards.

Fiat currencies have crumbled in many countries including Zimbabwe. The question is why? Why do we lose trust in government and central banks? Their decisions have caused financial exclusion. There are billions of people across the who are either unbanked or underbanked. The golabal financial system has failed to appreciate the value that these people bring to the table.

Cryptocurrency

Bitcoin is a financial disruptor. It is a peer to peer payment system without a central controlling authority. Anyone can participate including the unbanked and underbanked. Its value is derived from its network of users

Bitcoin solves all the problems that we are facing with banks and institutions.

Life is about to change for the worst for most South Africans. Here’s what they need to know. Life was going to get worse for them anyway, with or without the downgrade. The economy has been declining. A declining economy means tougher outlooks for the majority of the population.

Winners and losers

Now, that doesn’t mean that some people won’t make it big. They always do. There will always be people who make it despite the challenges. These are the people who see opportunities where others predict doom and gloom. A doom and gloom mindset brings a negative return on investment. An optimistic mindset reverse engineers the future. There will be more losers than the winners. Live on the premise that no one owes you a living.

Decision time

South Africans need to decide whether they will outsource their happiness to clueless political leadership or they will take charge of their future. Now, it’s easier said than done because a lot of people lack the basic understanding of how the economy works. This is why they can vote clueless people into office. They do not understand the economic role of the government. Neither do they understand their role as custodians of the constitution to help with checks and balances on government performance.

Learn from the Zimbabwe experience

Zimbabwe went through the same period of national ignorance. We outsourced our economic well being to a government which did not have long term plans for the country. We did not hold them accountable when the first signs of mismanagement and corruption manifested. We believed the lie that external forces were responsible for the destruction of the economy. Even if external were involved, and I know that there’s a global economic and monetary war, we were willing protagonists in the destruction of our own economy.

What can South Africans do?

There are two things South Africans can do. Firstly they should continue to use the independent state institutions to hold the government to account. South Africa is still lucky to have a political atmosphere where the deputy president can publicly disagree with the president without any personal ramifications. Secondly, South Africans should individually stop relying on the government to solve their problems. They should understand capital and learn to create capital. The internet has democratised wealth creation and South Africans should find out the many ways they can do this. In some of my blog posts I do talk about the different ways.

How about the government of South Africa?

The government should realise that they have been dependent on western capital for too long. They should start understanding capital and communicating with their people. They should start creating their own capital to wean themselves from the dependency syndrome on western aid. That’s a tough task to implement but South Africa and all other African countries should leverage the skills and expertise of their educated citizens and entrepreneurs across the globe to crowdsource ideas that will drive economic growth and development. It is not rocket science. The process of collaboration and implementation is itself an economic driver.